Diagnosis
“Can I understand what this will cost and how the debt could change?”
Customers stop when they cannot picture what the loan will look like in ten or twenty years.
Customers cannot picture how the balance moves over time, so they treat an unknown future cost as a large one and stop before enquiry. Cost and fees are the two strongest choice drivers in the survey, so this is where clarity buys the most progress.
Cost is not only a price question. Customers are trying to work out how large the balance could become, what would be left of their equity and whether anything could force a decision they did not plan for. When they cannot answer that, they treat the uncertainty itself as the risk.
Fees and interest are the two most-cited reasons for hesitating, ahead of any concern about the provider.
Cost concern is concentrated on the things customers cannot see in advance
These are not requests for more disclosure. Customers already assume the detail exists somewhere. What they cannot do is convert that detail into a picture of their own balance, their own remaining equity and the point at which the loan would need to be repaid.
“I could not tell you what I would owe in fifteen years, and that is the number that matters.”
Uncertainty is read as risk, not as missing information
When people cannot bound an outcome, they do not average across the possibilities. They anchor near the worst plausible one and then avoid the decision rather than investigate it.
Compounding makes this harder. Most people substantially underestimate how a balance grows over time, so when they do finally see a projection it can confirm the fear rather than resolve it. The projection has to arrive early, with the protections attached.
- Ambiguity aversion
- An outcome with unknown limits feels worse than a known outcome of the same expected size.
- Exponential growth neglect
- People underestimate compounding, so a later reveal of the projected balance feels like a shock rather than a fact they had already priced in.
- Decision avoidance
- When a choice feels difficult to assess, deferring it feels safer than getting it wrong, even when delay has its own cost.
Disclosure is not the same as clarity
The same facts can either close the question or leave it open. What separates the two is whether the customer can see their own numbers and the limits that apply to them.
“Fees and interest rates are set out in the product documents and the comparison rate is shown.”
Accurate and compliant, but it asks the customer to model the outcome themselves. Most will not, so the question stays open and the decision is deferred.
“Here is the projected balance and your remaining equity at 5, 10 and 20 years on your own loan amount, and here is the guarantee that you can never owe more than the home is worth.”
Turns an open-ended fear into a bounded range the customer can examine, discuss with family and return to.
Showing the shape of the debt, including the years where it grows fastest, is more persuasive than softening it. Customers who can see the boundary stop imagining that there is not one.
Let customers see their own numbers before they have to ask
Put a projection in the exploration stage
Show the projected balance and remaining equity over time on the customer's own figures, at the point they get a borrowing estimate rather than after an enquiry.
Name every cost in one place
Set out establishment, ongoing and discharge costs in plain English on a single view, so customers do not suspect there is more they have not found.
Attach the limits to the numbers
Show the No Negative Equity Guarantee and the repayment triggers alongside the projection, not in a separate section, so the boundary arrives with the growth.
Cost clarity is not a disclosure task. It is the difference between a customer who defers and a customer who can hold a specific, checkable number in mind.
Data notes
- Quantitative base: 212 Australian homeowners aged 55 and over, all main or joint household financial decision-makers.
- Measures reported on this page: 67%, 60% and 52%.
- Customer language is taken from the depth interview programme with homeowners aged 55 to 75.